Disgraced investment services firm Lehman Brothers emerged in 2012 from behind the largest Chapter 11 bankruptcy filing in US history, brought about by its role in the subprime lending crisis. The company is now engaged in a long and complex liquidation, slowly chopping itself into $65 billion worth of bits and giving those bits away to creditors. But even dying giants have some fight left in them: the slowly decaying remains of what was once Wall Street's fourth-largest investment bank have filed suit against Intel because of a billion-dollar deal gone bad.

According to Reuters and other sources, Lehman is accusing Intel of violating the terms of a swap agreement, which was put in place at the end of August 2008, days before Lehman's bankruptcy filing in mid-September. The swap agreement saw Lehman Brothers attempting to procure a quick influx of cash for one of its over-the-counter derivative units by trading 50.5 million shares of Intel stock back to Intel in exchange for $1 billion. To secure the deal, the Lehman derivative company put up an additional $1 billion as collateral against the stock.

The deal was supposed to conclude a few weeks after it was struck, with Intel being handed the 50.5 million shares of its own stock and Lehman getting back its collateral. Instead, on September 29, when the swap was supposed to close and Intel was to receive its stock, Intel seized Lehman's $1 billion in collateral cash and called it a day.

On one hand, that's what the collateral was there for—at that point, Lehman and all of its subsidiaries were embroiled in the kick-off of a $639 billion bankruptcy, and they had bigger problems than the swap agreement. On the other hand, Lehman is now saying that Intel went too far in seizing the collateral: "The value of 50,552,943 shares of Intel common stock on September 29, 2008 was about $873 million, not $1 billion," reads a statement from Lehman.

Lehman's contention is that Intel seized far more than it was due when it grabbed the collateral—according to the lawsuit, Intel's seizure of the whole billion dollars in cash exceeds the value of the 50.5 million shares of stock it was supposed to get. Intel's argument, on the other hand, is that the swap agreement filing stated that Lehman was to deliver "$1 billion in Intel common stock," and so it feels the seizure of Lehman's $1 billion cash collateral repays the $1 billion it sent over to Lehman.

At this point, the only thing that's certain is that Lehman wants some amount of money from Intel, which will likely include not just some of the seized collateral but also damages and attorney fees. Intel itself has not yet commented to any of the major news agencies.

Lee Hutchinson / Lee is the Senior Reviews Editor at Ars and is responsible for the product news and reviews section. He also knows stuff about enterprise storage, security, and manned space flight. Lee is based in Houston, TX.